Tuesday, March 18, 2014

Auto-Bill Pay Can Pay Your Bills Even After You are Dead

In a news story that looks like it should be reported in a law school casebook, a Detroit woman died in her home, yet her bank continued to pay the automatic payments from her account until the money ran out. Then came a foreclosure on her home. All of this occurred over a period of about six years.

A few points worthy of discussion beyond the obvious problem that her family and friends were not able to discover her death. First, is that the perpetual nature of recurring payments may result in payments to creditors proceeding even after death. In terms of the basic assent and authorization of the payments from the account under U.C.C. 4-401, it would seem to be a valid question whether she continued to "authorize" these payments under the properly payable rule after death. Second, a contractor discovered the death after authorities foreclosed on the house due to non-payment of taxes. One of the lingering issues with foreclosures is the access to the property available to buyers, contractors and even governmental agents. One might wonder how the foreclosure possibly proceeded without any response from her or suspicion as to the reality of her demise.